Darlington Building Society announces strong financial results despite pandemic

Darlington Building Society has announced “robust” results despite the momentous economic challenges presented by the Covid-19 pandemic.

Chief executive Andrew Craddock described the society’s financial performance over the past year as “a testament to the way the staff pulled together in unprecedented circumstances”.

Total assets rose from £666m in 2019 to £705m and pre-tax profits remained healthy at £0.73m.

Although profits fell from £1.77m in 2019, this was primarily due to factors associated with the pandemic: the housing market effectively closing during the first lockdown; two base rate reductions by the Bank of England: and additional funds being set aside to cover increased bad debt provisions.

Costs were also up because, despite the national economic turmoil, the Society invested in additional staff – including eight apprentices – as well as technological advances.

“It’s been the hardest year I’ve ever known, and I couldn’t be prouder of the staff – it’s been humbling,” said Mr Craddock. “In the context of the unprecedented challenges in the economy, it is an extremely robust set of results.”

Chairman Jack Cullen paid tribute to the “fantastic and selfless way” in which the whole team had responded in remaining open for business.

“Although profitability is lower, we remain a strong, safe and resilient society, with robust levels of capital and liquidity, well in excess of regulatory requirements,” added Mr Cullen.

Breaking through the £700m barrier for total assets places Darlington Building Society in the top 20 biggest building societies in the country.

Due to being in such strong financial shape, the society was able to negotiate the three national lockdowns without having to rely on the government’s job retention furlough scheme.

“We are a resilient organisation, with strong reserves, and it wouldn’t have been right to take advantage of taxpayers’ money,” said Mr Craddock.

Staff were also given early assurances about job security and being kept on full pay, irrespective of whether they were working full-time. That caring approach led to an “outstanding” two-star rating from Best Companies, based on a staff survey.

The society also continued to support the community through its pledge to contribute five per cent of its profits to local good causes. A total of £77,438 was donated to 16 community organisations, and the society extended its five per cent pledge to 2025.

Despite ongoing concerns about the economy, Mr Craddock said he was confident about the year ahead.

Investment in new technology will begin to pay dividends, and branches in Redcar and Bishop Auckland will relocate to more prominent sites, with better disabled access.

“Thanks to a tremendous team effort, we’re in a really strong position, with ambitious plans to provide an even better service for members, look after our staff, and support our communities – and that makes me incredibly proud,” he said.

Other highlights include:

• General reserves up to £46.6m from £45.7m in 2019.
• New mortgage lending £124m compared to £138m.
• New savings balances £19m compared to £52m.
• Customer satisfaction 97.4%.